The surprisingly low inflation figure meant many things to different people.
Consumers were happy - if somewhat dubious - that, broadly speaking, prices went backwards in March quarter.
Economists were shocked that they had been blindsided, although a bit excited that a new record low in core inflation could be inserted in their spread sheets.
For money market dealers, it simply meant sell the Aussie as the odds of an interest rate cut shortened dramatically.
While much of the analysis talked about the game-changing nature of the result, the quarter could well be just a number in a much longer struggle.
The seasonal and volatile fruit and fuel categories – down 11 and 10 per cent respectively - were largely responsible for the first fall in consumer prices in more than seven years.
But there was a subtext of deeper disinflationary dynamics at play than just collapsing oil prices and bountiful summer harvests.
Structural change is driving down inflation
Competitive pressures in the supermarket aisles, mobile phone plans and clothes played their part, as oligopolies break down and digital technology continues to disrupt traditional business models and pricing.
Slower price rises in regulated sectors such as utilities, health insurance and rates, as well as record low wage growth, also put the brake on inflation.
While the bulk of the world's major economies have been battling to drive up inflation since the GFC, Australia has maintained its position as a relatively high-inflation until now.
Recent research from the UBS economics team has found - comparing Australia's inflation to the US, Canada and Europe - it is typically 1 per cent faster in almost every sector on an annualised basis.
That outcome was driven by stronger economic and wage growth as well as less competitive market structures compared to other developed economies over the best part of a decade.
However, the March quarter produced the lowest quarterly and annual core inflation readings since the Reserve Bank set its target band at 2 to 3 per cent inflation.
It was also only the second time core inflation has slipped below the 2 per cent baseline, an occurrence that could well become rather more regular.
The UBS research notes structural disinflationary pressures have intensified and are now pushing down on almost a third of the CPI basket, or almost half when the impact of increased housing supply on rents and construction costs is included.
Lower for longer
UBS chief economist Scott Haslem said recent quarters have delivered the lowest core inflation results on average in 18 years.
"We doubt a short period of sub-target underlying inflation is a sufficient condition alone for the RBA to trim the cash rate," Mr Haslem said.
"However, it lowers the hurdle for further rate cuts, should other factors come into play, like rising unemployment, a sustained high Australian dollar or a deteriorating global backdrop."
However there is "a significant risk" of a lower-for-longer scenario in the UBS analysis were inflation may sit at around 1.75 per cent over coming years.
UBS rates it as about one-in-three chance of panning out.
"Lower trend inflation for Australia would have material implications, likely translating into a lower RBA neutral cash rate and a lower trend for the Australian dollar," Mr Haslem said.
While RBA governor Glenn Stevens would no doubt appreciate the lower dollar, as a staunch defender of the inflation band, he might have cause for some concern about continued disinflation.
The 2 to 3 per cent band popped up as an idea from former governor Bernie Fraser in the early 1990s and progressed to be an RBA article of faith and ultimately a signed deal between the bank and successive governments over the past twenty years.
The target was set higher than most developed economies - the US, UK, EU, Canada and New Zealand now all see the magical number for price stability at 2 per cent, or lower.
Bank of Japan running out of inflationary weapons
The Bank of Japan has an inflation target of 2 per cent as well, although its governor Haruhiko Kuroda this week bailed on his ambition to hit it next year, saying 2018 was now more likely after inflation fell a worse than expected 0.3 per cent deeper into deflationary territory.
Mr Kuroda, who is rapidly running out of weapons to reflate his economy, would no doubt love to be in Mr Stevens' position of positive inflation and positive interest rates.
Mr Stevens, for his part, is unlikely to panic at the first sniff of inflation going backwards.
Mr Stevens recently told a roomful of Wall Street bankers he was not overly impressed by zero or negative interest rates and other adventurous monetary tools as sustainable weapons in the global battle against low inflation.
As he has repeatedly pointed out, the RBA's inflation target has a degree of flexibility being "on average, over the course of the cycle."
In a speech many years ago in defence of inflation targeting , Mr Stevens pointed out that, while the RBA cares about inflation, it is not the only thing it cares about and it is conscious to avoid being labelled a bunch of "inflation nutters".
Mr Stevens and his board have proved themselves to be reluctant cutters in the face of below trend growth and inflation bumping along at the bottom of the inflation range.
Among the "other things" the RBA clearly worries about is blowing up a property bubble.
The short term questions are: How hard is the board prepared to go at pushing up inflation? And, is a 25-basis-point cut sufficiently big to change anything or will it merely add to financial risks?
For those thinking the RBA will cut on Tuesday, it is perhaps worth looking at a 1999 speech Mr Stevens made quoting his old boss, and architect of the inflation band, Bernie Fraser.
"There is no sense in doing things which would destabilise the economy in order to add a few tenths of a per cent to the CPI: patience and good sense are needed," Mr Stevens told his audience.
That patience may be tested down the track if the current low levels of inflation are not merely cyclical, but deeply entrenched and structural responses to an economy very different from days the when the 2 to 3 per cent band was set.
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